Steve Bucci has been helping people decode and master personal finance issues for more than 20 years. He is the author of “Credit Management Kit For Dummies,” “Credit Repair Kit For Dummies,” “Barnes and Noble Debt Management,” co-author of “Managing Your Money All-In-One For Dummies” and “Debt Repair Kit For Dummies” (Australia). Steve is an experienced expert witness in identity theft, credit scoring and debt related cases. He has been a presenter at the FICO InterACT Global Conference, the Federal Reserve and the International Credit Symposium at Cambridge University in the UK.
Am I liable as an authorized user for my deceased husband’s card debt?
If you live in a community property state, you could be liable for your husband’s unpaid card balances. If you don’t live in a community property state, your status as an authorized user effectively clears you from any responsibility for the debt. However, you should notify the card companies of your husband’s death, and don’t use the cards in the meantime.
Dear Keeping Score,
What if the credit card companies will not remove me as authorized user on my deceased husband’s credit cards? He died Nov. 13, 2018 and he added me as a user but I don’t have any income. I don’t have money to pay these credit card debts. What if I call the companies to tell them he has died but they won’t remove me from the accounts? – Peggy
I am sorry for your loss. While I know this is all new, uncharted territory for you, I do want you to know what your responsibility is to the credit card companies with whom your husband had accounts.
The first thing you need to know is that once your husband died, his accounts became invalid. Unless you are a joint owner – as opposed to an authorized user – of any of these accounts, you cannot continue to use them. So, your concern that you won’t be removed as an authorized user is not something for you to worry about. The accounts will be immediately closed upon notice that the account owner is deceased.
What this means for you right now is you should not use the cards for any reason whatsoever. Using the cards after his death could constitute an unintentional fraud. You should immediately contact each of the credit card companies by phone to inform them of your husband’s death.
You will then need to provide proof of his death. The companies may require a certified death certificate, or they may accept a photocopy. I would suggest you send any letters via certified mail, return receipt requested.
If you want more information, my book, “Credit Repair Kit for Dummies,” addresses the subject of dealing with the debts of the deceased in chapter 12. This book is available on Amazon.com or in your local library if you want to check it out for more information.
See related:6 steps to take when a credit card holder dies
Your debt liability depends on where you live
Now let’s address your concern about the balances on the cards. In the majority of states you don’t have anything to worry about (assuming you are simply an authorized user and not a joint account holder).
However, in community property states, debts incurred during the marriage are considered to be owned by both parties, making both parties liable for the debt.
According to the Consumer Financial Protection Bureau, “In community property states and depending on that state’s law, the surviving spouse may be required to use community property to pay debts of a deceased spouse. The community property states include Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.”
I understand you do not have the funds to pay off the credit cards. But if your husband left behind assets, and you are in a community property state, you may be liable to repay the debt using those assets. If that is the case and you truly cannot see a path forward to paying off the credit cards, you do have a few options.
One option is to ignore it, but know that this will not make the debt (or the collectors) go away. Ignoring the problem could lead to you being sued for the debt. If your husband had a 401(k) plan or other retirement account or life insurance policy, the proceeds may or may not be available to satisfy his debts.
The key factor in determining this matter is whether the proceeds go through probate or not. If the funds go through probate, they will be available to satisfy any debts before being distributed to any heirs. If the funds do not go through probate, but go directly to designated heirs, then they are not subject to creditor claims. But retirement accounts and insurance typically don’t go through probate.
Tip: How can you help someone who’s being financially abused repair his credit?If you have power of attorney, you can freeze his credit and contact the card companies to which he owes balances. You can also hire a lawyer in case debt collectors pursue legal action.
If you’re liable, you may have to seek employment or professional advice
You have some other options to manage repayment should it be necessary. You may try to find employment for yourself to earn the money you need to pay off the credit cards. Or you could consider liquidating some assets, via a garage sale, eBay or other means, and use those funds for the same purpose.
If none of the above work in your situation, I suggest you get some free professional advice. Contact a nonprofit credit counseling group that is a member of the National Foundation for Credit Counseling (all members are accredited by the Council on Accreditation) for help.
You might be a candidate for a reduced and extended repayment plan called a debt management plan. If not, your counselor may suggest you speak to an attorney about various legal options, including bankruptcy. Bankruptcy is a serious but legitimate solution for some. I hope you don’t have to resort to that. Again, I am so sorry you have to go through this on top of losing your husband.
Remember to keep track of your score!